Great Lakes Wire

As the deadline for the implementation of Michigan's minimum wage and Earned Sick Time Act (ESTA) approaches on February 21, a bipartisan agreement has been reached regarding minimum wage, while discussions on ESTA continue.

In 2024, Democrat majorities did not act on changes requested by constituents and businesses concerning laws established by the Michigan Supreme Court. However, when Speaker Matt Hall and House Republicans assumed control in 2025, they promptly held hearings and passed House Bill 4001 (tipped wage) and House Bill 4002 (ESTA) with bipartisan support on January 23, 2025.

At the start of February, Senate Democrats began negotiations despite opposition from unions and progressive groups. The Michigan Senate passed a bipartisan deal to address minimum wage issues. This agreement aims to mitigate the impact of minimum wage increases by preserving the tipped wage for restaurant servers.

The tipped wage will rise from 38% to 50% over five years. The general minimum wage is set to increase to $15 by 2027. Instead of linking increases to the Urban Consumer Price Index (CPI), they will now be tied to the Midwest CPI, traditionally lower in percentage terms. The bill is connected to HB 4002, which proposes changes to ESTA; without an agreement on ESTA, this bill will not take effect.

Discussions about ESTA are ongoing as House Republicans advocate for a small business exemption. These negotiations may extend until February 21. Meanwhile, NFIB advises members to prepare for compliance with existing law while updates are awaited.

Any new legislation is unlikely to include all changes supported by NFIB due to divided government dynamics. Nonetheless, some adjustments may reduce the impending impact of these laws. NFIB remains committed to advocating for legal changes benefiting small businesses during this session and beyond. For inquiries, contact Michigan State Director Amanda Fisher.